Nvidia may shine again when it reports on Wednesday

By Philip van Doorn

Also, Lyft soars as Uber plans buybacks, health and retirement planning and help with decisions on paying off loans and buying or selling homes

Shares of Nvidia Corp. have been on another tear. The stock is up 47% this year (after more than tripling during 2023) and this week overtook Alphabet Inc. to become the third-largest company in the S&P 500 by market capitalization.

Nvidia (NVDA) will announce quarterly results next week, and once again the year-over-year comparisons will be astounding because the company continues to dominate the market for graphics processing units (GPU). This was pretty much a new market last year as data centers scrambled to deploy GPUs and related hardware to support their corporate customer's build-out of artificial-intelligence technology.

Nvidia has an odd fiscal year - Wednesday's report will be for the fourth quarter of its fiscal 2024, which ended Jan. 29. Since the year-over-year comparison of quarterly results will be so extreme, here's a look at the past four fiscal quarters' results, along with consensus estimates among analysts polled by FactSet for the quarter to be reported Wednesday. Sales figures are in millions.

     Estimate for quarter ended 1/29/2024  Quarter ended 10/29/2023  Quarter ended 07/30/2023  Quarter ended 04/30/2023  Quarter ended 01/29/2023 
   Sales                                                            $20,374                   $18,120                   $13,507                    $7,192                    $6,051 
   Change from year-earlier quarter                                    237%                      206%                      101%                      -13%                      -21% 
   Change from previous quarter                                         12%                       34%                       88%                       19%                        2% 
   Earnings per share                                                 $4.59                     $3.71                     $2.48                     $0.82                     $0.57 
   Change from year-earlier quarter                                    704%                     1262%                      850%                       29%                      -52% 
   Change from previous quarter                                         24%                       50%                      202%                       44%                      110% 
                                                                                                                                                                    Source: FactSet 

Nvidia's quarterly sales perked up during the quarter ending April 30, and accelerated from there. For the quarter to be reported next week, the year-over-year sales growth again should be incredibly high. But analysts are expecting the sequential quarterly sales growth to slow to 12% from 34% the previous quarter.

Read: Nvidia is expected to be the best performer in the S&P 500 through 2025, by this measure

Ken Laudan, the portfolio manager of the Buffalo Large Cap Fund BUFEX BUIEX said during an interview with MarketWatch on Thursday that the analysts' estimates were conservative, because even "hyperscalers" among datacenter operators have been "buying whatever GPUs they can get."

He expects 2024 to be another year in which the "AI enablers," or companies making GPUs and related equipment such as Nvidia and Taiwan Semiconductor Manufacturing Co. (TSM), and cloud services providers (Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN) and Alphabet (GOOGL)) will continue to dominate AI-related investing.

Laudan expects the focus of the AI build-out to shift to "AI adapters" in 2025 or later. He described this group as "software-centric companies that sell an AI large-language model on top of their enterprise or vertical software stack to their clients." These might include companies such as Adobe Inc. (ADBE), ServiceNow Inc. (NOW), Salesforce.com Inc. (CRM), MongoDB Inc. (MDB) and Snowflake Inc. (SNOW), he said.

More coverage of Nvidia:

Nvidia discloses positions in SoundHound AI, Arm - and these other stocksBarron's: How Nvidia Is Playing Apple's Game, Just a Lot Faster

A warning: Bullish bets on Nvidia, other 'Magnificent Seven' members near their most crowded levels in the past year

A different AI play: Cisco could be a late bloomer in generating big AI revenue

Lyft's (corrected) numbers look good - and Uber makes a big move

On Tuesday, Lyft Inc. (LYFT) reported its fourth-quarter results, which included a typographical error in the company's outlook for 2024. An initial aftermarket rally sent the shares up as much as 60%, but that gain was trimmed when Lyft issued a correction.

But Lyft's shares still rose 35% on Wednesday, before rising another 16% on Thursday. The stock was up 27% for 2024 through Thursday, but it has been quite a ride, as you can see in this year-to-date chart for the stock's return and that of its rival, Uber Technologies Inc. (UBER):

Bill Peters broke down Lyft's results.

Lyft might have made its reporting error because of the overuse of jargon, as Therese Poletti explained.

Uber also made a splash this week, announcing a $7 billion share buyback program - the company's first move to lower its share count.

More: Uber 'just started to flex its platform muscle': Can other gig-economy players keep up?

Alarming estimates underline the importance of saving, planning and long-term investing

Brett Arends looked at two formal studies and sets of estimates on the likelihood of people suffering from dementia late in life, and even the more conservative set of numbers is alarming. Here's a look at the estimates and the potential financial consequences.

More from Brett Arends:

CPI? Who cares? This is why I love my inflation-protected bonds.Do Trump's NATO comments pose a risk for international stocks - and your 401(k)?

Retirement questions

In her Help Me Retire column, Alessandra Malito had suggestions for a 60-year-old trying to decide whether or not to withdraw $250,000 from a 401(k) account to pay off a mortgage loan.

More help: I'm 58, earn $4,400 a month and want to retire at 60. Is this doable? Do I really need to replace 80% of my income?

Signs of a revival for the IPO market

Rising interest rates put a damper on the market for initial public offerings of stock last year, as fundraising by venture-capital firms plunged. But there are now signs that volume is picking up, as Steve Gelsi reported.

A different way to go public: DWAC up over 15% as it moves to buy Trump Media & Technology Group - but here's a potential snag

The Big Move

In the Big Move column, Aarthi Swaminathan works through numbers with readers making decisions on buying or selling homes:

We rent our $750,000 home with a 2.5% mortgage rate for $4,000 a month, but the tenant is leaving. Should we sell now or later?We're in our 60s, retired and make $300,000 in passive income. We want to buy a house for our daughter. What could go wrong?

Here is more real-estate-market coverage:

Moving to New York City? Be ready to drop more than $10,000 up front to rent an apartment.Big Lots, Express and Children's Place could spell more trouble for commercial real estate, Barclays saysHow real-estate agents and private developers created the blueprint for redlining, according to one historianHere's the investor playbook for making money in commercial real estate as Fed delays rate cuts

A contrarian play

Mark Hulbert surveyed investment letters to identify their favorite industry in the stock market right now - you might be surprised.

Something else for contrarians: Growth stocks are outperforming value by widest margin on record. Why that could soon change.

A moon launch and a binary event for a stock

Shares of Intuitive Machines Inc. (LUNR) rose 15% on Thursday, after the successful launch of a SpaceX Falcon 9 rocket carrying what is expected to be the first U.S. commercial spacecraft to land on the moon and the first U.S. landing there since 1972. Intuitive Machines built the Nova-C lander, which is expected to touch down near the moon's south pole next week.

James Rogers has been covering the mission's milestones since the launch.

Financial crime - a high profile

Lukas I. Alpert writes the Financial Crime column. This week he told the story of Mani Chulpayev, who was able to continue his criminal activity for many years while serving as an informant for investigators and prosecutors.

More from Lukas I. Alpert:

The lawyer who beat Trump twice stands to make a fortune for doing soThe checks that led to Trump's first criminal trial in the 'hush money' scandal

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-Philip van Doorn

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02-17-24 0538ET

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